Payroll Responsibilities Every Employer Should Know
Posted On 12.11.2020
Congratulations! You have hired your first worker, and it is time to be sure they get paid. If you’re new to this, then you’ve probably found yourself in uncharted waters. While browsing the seas of IRS terminology might appear intimidating, we’re here in order to help you through it.
Payroll Responsibilities Every Employer Needs to Know
Let’s face it, out of everything you do as an employer, payroll calculations and taxation are among the least enjoyable. However, taxes are a simple fact of life for every small business owner, so it’s ideal to know as much as you can prior to getting started.
What are Payroll Taxes?
Employment taxes, commonly referred to as payroll taxes, are such taxes you as an employer must consider when paying your employee(s). Some of these taxes are withheld from your employee’s pay while others are your own responsibility.
- Federal, state, local withholdings for income taxes
- FICA tax exempt
- FCA tax-exempt equal to worker amount
- Unemployment taxes according to employee cover
- State and national employee’s compensation funds (according to employee pay)
Added Payroll Deductions:
Voluntary payroll deductions are agreed to by the individual employee. Your workers participate willingly in such deductions and decide to get this sum withheld from their paychecks to cover or donate to a number of advantages.
- Health Care Insurance
- Line Insurance
- Retirement Plans
- Employee Stock
- Job-Related Expenses (Unions dues, uniforms, etc.)
Employer Payroll Obligations
Your obligation to payroll taxes continue after your worker’s paychecks are issued.
- Employer’s share of payroll taxes
- Calculating payroll expenses via fiscal reporting
- Preparing reconciliation reports and forms
- Sending payroll taxes and yields to the IRS
Employer Payroll Taxes
As a small business proprietor (s), you’re liable for paying the employer’s portion of payroll taxes. This sum is an extra expense in addition to the company’s payroll tax. You Have to pay your share of payroll taxes such as:
- Medicare Tax
- Social Security Tax (6.2 percent )
- State Unemployment Tax (SUTA)
- Federal Unemployment Tax (FUTA)
- Share Payroll Taxes (Employer & Employee)
The FICA tax is included in their Medicare & Social Security taxation and this sum is paid by both you and the worker. Each party has to pay half the taxation that generally is 15.3 %.
- Social Security (6.2 %)
- Medicare (1.45 % )
- Social Security (6.2 % )
- Medicare (1.45 %)
Simplify Your Payroll and Compliance
As a small business owner, you do not wish to cover an enormous sum of money to get a payroll application solution using immaterial tools you’ll never use. In case you’ve been processing and submitting your payroll, we applaud and salute you for your valiant attempts. We are aware it is not a simple endeavor.